Truxton Corporation Reports Fourth Quarter And Full Year 2022 Results
FOR IMMEDIATE RELEASE
NASHVILLE, TN, January 26, 2023 – Truxton Corporation, the parent company for Truxton Trust Company (“Truxton” or “the Bank”) and subsidiaries, announced its operating results for the quarter and year ended December 31, 2022. Fourth quarter net income attributable to common shareholders was $4.1 million, or $1.40 earnings per diluted share, compared to $4.0 million, or $1.39 earnings per diluted share, for the same quarter in 2021.
For the year ended December 31, 2022, net income increased by 15% to $16.7 million from $14.5 million in 2021. For the year ended December 31, 2022, earnings per diluted share rose to $5.75 from $5.02, an increase of 15% from 2021.
“The year just completed was challenging, but Truxton grew more and earned more than ever before,” said Chairman and CEO Tom Stumb. “Net loan growth of more than $120 million represents a tremendous effort by our lenders and the managers and teams who support them. Our wealth management revenue grew 8% in a year when both stock and bond prices fell precipitously, reflecting both relatively strong investment performance and the addition of many new client relationships.”
- Truxton partially restructured the bond portfolio in December and realized $588 thousand of losses on the sale of $20 million in securities. This allowed us to improve our interest rate risk profile and should contribute to an increase in our future earnings compared to what we would have achieved on these bonds had we not sold them. The after-tax cost of these losses lowered earnings per share by approximately $0.16. Excluding these losses, earnings per diluted share for the quarter would have been approximately $1.56, which is 5% higher than $1.49 in the third quarter of 2022 and 12% higher than $1.39 in the fourth quarter of 2021.
- Non-interest income, excluding bond losses, grew to $4.4 million in the fourth quarter of 2022, an increase of 2% from the third quarter of 2022 and 2% in comparison to the fourth quarter of 2021. Wealth management services constituted 95% of non-interest income, excluding bond losses, in the fourth quarter of 2022.
- Loans rose 1% to $619 million at year end compared to $612 million on September 30, 2022 and were up 25% compared to $495 million on December 31, 2021.
- Total deposits increased 2% from September 30, 2022, to $808 million at December 31, 2022, and increased less than 1% in comparison to December 31, 2021. Truxton continues to fund its growth from a single banking location led by its commitment to provide what it believes is superior deposit operations service and technology. As a result, occupancy expenditures and fixed asset investments are a fraction of typical peers.
- Net interest margin for the fourth quarter of 2022 was 2.83%, a decrease of 12 basis points from the 2.95% experienced in the third quarter of 2022, but an increase of 35 basis points from the fourth quarter of 2021. Cost of funds was 1.73% in the fourth quarter of 2022, up from 1.02% for the quarter ended September 30, 2022, and an increase from 0.47% in the quarter ended December 31, 2021.
- Asset quality remains sound at Truxton. Truxton had no non-performing assets at December 31, 2022. Truxton had $2 thousand of recoveries in the fourth quarter of 2022, $0 in the trailing quarter, and $5 thousand of charge-offs in the fourth quarter of 2021.
- Allowance for loan losses was $5.8 million, $5.8 million, and $4.8 million at quarter end December 31, 2022, September 30, 2022, and December 31, 2021, respectively. For the same three periods, the Bank’s allowance was 0.93%, 0.94%, and 0.97%, respectively, of gross loans (including PPP loans) outstanding at period end. Truxton will adopt the Current Expected Credit Loss accounting methodology for purposes of calculating its allowance for credit losses effective January 1, 2023.
- Truxton has several sources of lightly taxed income including the yield on bank-owned life insurance, the earnings of the bank’s captive insurance company, and the interest income from the bank’s tax-exempt bond portfolio that cause its effective rate to be below the combined statutory rates, but the effective tax rate for 2022 increased to 18.4% from 16.5% in 2021 as the proportion of fully taxable income grew.
- The Bank’s capital position remains strong. The Tier 1 leverage ratio was 9.78% at December 31, 2022, 9.78% at September 30, 2022, and 8.95% at December 31, 2021. Book value per common share was $25.39, $23.84, and $29.19 at December 31, 2022, September 30, 2022, and December 31, 2021, respectively. The decline in book value per share at December 31, 2022, when compared to December 31, 2021, was the result of accumulated other comprehensive losses associated with declining values in the Company’s bond portfolio caused by the rising interest rate environment.
- During the twelve months ended December 31, 2022, Truxton Corporation paid dividends of $2.36 per common share and repurchased 32,000 shares of its common stock for $2.2 million total, an average price of $68.88 per share.
About Truxton Trust
Truxton Trust Company is a provider of private banking, wealth management, trust, and family office services for wealthy individuals, their families, and their business interests. Serving clients across the world, Truxton’s vastly experienced team of professionals provides customized solutions to its clients’ complex financial needs. Founded in 2004 in Nashville, Tennessee, Truxton Trust upholds its original guiding principle: do the right thing. Truxton Trust Company is a subsidiary of financial holding company, Truxton Corporation (OTCPK: TRUX). For more information, visit truxtontrust.com.